Over the last several days, I’ve been talking to numerous lawmakers about the private option. The fate of the policy – which uses Medicaid funds to purchase private health insurance for low-income Arkansans – hangs in the balance in the coming fiscal session. In order to continue to appropriate the federal funds that go toward the policy, a 75 percent supermajority in both houses must approve (the appropriation passed last spring with two votes to spare in the House and one in the Senate, but one vote in the Senate was lost after the resignation of Sen. Paul Bookout, replaced by private option opponent John Cooper, reducing the margin for error to zero).

Most lawmakers I spoke with said that they were in the same place but would approach the fiscal session with an open mind. Many—including some who voted against the appropriation last spring—expressed interest in modifications to the private option policy.

Two legislators who voted for the appropriation last spring — Missy Irvin in the Senate and John Hutchison in the House — said that at this time they would not support the “private option” in its present form. With the margins as tight as they are, that has to be a concern to advocates of the policy.

Probably the wisest thing I heard was from Rep. Justin Harris: “If I was a betting person right now I would not bet what’s going to happen." It’s going to be a long two months. Here’s a sampling of what I’ve heard:

I stand with the decision that I made. I think we’re going to see some awful good things come out of the private option. … I’m a YES now, however I am reading and looking at every bit of information that I can.

REP. JOHN HUTCHISON (voted YES last session)

I think it needs fixing, I think it needs tweaking. There’s got to be a few changes, got to be some major looking in to. … At this point, I cannot vote for it, because it’s not structured right.

Brian Chilson

HUTCHISON: private option needs tweaks.

REP. NATE BELL (voted NO last session)Bell remains as opposed to the “private option” as ever but said he was taking a pragmatic approach given the constraints of the fiscal session.

In the Arkansas legislature, there are different thresholds for blocking an appropriation and passing legislation. So many people confuse the two and believe that because you have the votes to beat an appropriation, you can actually accomplish something, and that's just not the case. Where I'm at at this point is not so much, ‘are the votes there to block an appropriation?’ Yes, they are, and I think anybody in the Capitol building would agree with that. There's no doubt that the private option emerges from this fiscal session looking somewhat different. The question becomes — can there be a point found where everybody can agree that this is how we move forward?

Bell said it was too early to tell what sort of tweaks or changes might be made to the policy but “that’s simply the only way to go forward.” He said there was “no question” that the votes were to block the appropriation, but simply blocking it “doesn’t solve anything—it causes bigger problems.”

I think it’s fair to say I’ve pushed my no buttom more than anyone. But I’m only going to vote no when I can accomplishing something by voting no. Leaving a session with no appropriation is not in the best interests of Arkansas. I didn’t come down here to burn the house down just to make a point.

I don't think any fair-minded person down here believes that the votes are there to re-authorize in current form. We can get in a big standoff and nobody wins. So my whole goal is to sit down and I've been doing this for several months now, sit down with people on both sides of this thing and say ok, what's the wish list look like? There's some draft legislation circulating around. It's certainly not something we're going to float out to the public yet, but there's several drafts floating around, seeing if there can be some agreement.

I'm hopeful. I want to make it expressly clear, I'm not a fan of the private option for reasons I've stated many times. At the end of the day, it’s in the best interests of the state if we can move away from it. But completely moving away from it in a fiscal session with the divided opinions that we have in the legislature is simply not possible.

As of right now, we’ve not heard of anyone changing their votes and that goes both ways, from a YES to a NO or a NO to a YES. I don’t know, without having re-polled the membership, where things stand. The approach is going to be very similar to what it was during the last session. We’re going to present the facts and what the situation is and each member is going to have to make that decision for their district.

We are running what I believe to be a very efficient program. The waiver request has been approved and we’ve got additional requests that will be made that I think will help alleviate some of the concerns that are there.

The numbers came in where we thought they would as far as estimated costs. We do have a very viable population that’s decided to enroll in the private option. That should help alleviate concerns about future cost spikes. …What we’re doing with the private option appears like it’s going to have a positive impact on the exchange population and the insurance population as a whole. I think that should be one of the considerations of the membership.

We’ve got a pretty active discussion with members: If the private option were to stay in place, what would the members that oppose it like to see? There were some concerns for instance about the wraparound services. There have been some waiver requests [in Iowa] that appear to have been granted in writing to eliminate the wraparound requirement. Those are all positive things we should be looking to do.

SEN. MISSY IRVIN (voted YES last session)

“I’m not happy with the way [the private option] is going – right now I cannot support it,” Irvin said, and expressed skepticism that the legislature would have an opportunity to make the policy changes she would want during the fiscal session. Irvin expressed frustration about the reimbursement cuts to specialists that Blue Cross Blue Shield has enacted for coverage on the exchange (Arkansas Health Insurance Marketplace), including the private option patients. She was also disappointed in what she said was a lack of progress and clarity on the Health Savings Accounts (HSAs), which are set to be enacted in 2015, pending federal approval.

Before the private option passed, I was very adamant about the fact that I was very concerned that we had really not much control over reimbursement rates being cut and how that was going to play out. To me, that goes directly to access of care. I was very concerned about it, that’s why I was [initially] opposed to it and wasn’t going to vote for it. … What happened is reimbursement rates got cut so it was kind of an I-told-you-so moment for me. I know that folks are working on that. [The reimbursement cuts] jeopardize the private option going forward. There’s a lot of people on both sides of the aisle that are very, very concerned about that.

Right now I am against moving forward with the private option because it’s a problem with the policy but we don’t have the opportunity to fix that policy. That’s where we are with the fiscal session.

The reimbursement cut was a decision by a private company, BC/BS, so I asked what policy remedy she would favor — a government agency setting or enforcing prices?

Obviously we do not have the ability to affect that policy decision that BC/BS made. As we move forward, how are are going to deal with that? Yes, they’re a private company, but they’re receiving taxpayer dollars. I’m elected to make sure that taxpayer dollars are being spent wisely and correctly.…What I don’t want to see happen is that we’re spending all of our money on health insurance and not on health care. Because this is about health care for people. In effect, you can’t necessarily just hand the keys over to private industry, but that’s taxpayers dollars. They make policy decisions and we have no say-so in it. That’s a little bit problematic, for not just me but for a lot of folks on the other side of the aisle [some Democrats, including Rep. Deborah Ferguson and Rep. Steve Magie, have been vocal about their frustration with the BC/BS cuts to specialists].

Once you start accepting taxpayer's money, you're no longer really a private company. They kind of opened that door at the federal level. Insurance companies did that, I didn't do that for them. They walked down that road. ... I think it's bad policy to cut reimbursement rates to providers, I don't care who they are. That has ticked off the entire medical community, and it should.

I’m really not happy with the way things have moved forward. I’m just not. I saw this coming and then they proved me right. It’s kind of one of those things, if you make a fool of me once it’s your fault, if you make a fool out of me twice it’s my fault. That’s where I’m at. I see what has unfolded and I’m mad about it.

A last-minute amendment to the original private option legislation by Irvin made language about the HSAs more explicit, but Irvin complained that "we had language in the bill...and we haven't been meaningful about what we're doing now because we're kind of in la-la land floating around":

We don't have the amendments [to the federal wavier] in place. ... For me it's just a trust factor as to how we move forward. This was language that was written in the bill and I want to make sure that the language is carried out and I don't see that happening. The waiver amendments needed to be finalized at some point.

Irvin objected to the notion that she is a swing vote.

I’m not the only person making these determinations or these votes. There are 100 members in the House and 35 in the Senate. The notion that so much comes down to me is ludicrous in my opinion. It really doesn’t.

When I asked Irvin directly how she would vote on the appropriation, she responded, "I'm not going to answer that."

REP. JUSTIN HARRIS (voted NO last session)

I don’ think we’re going to have to flip anyone. I think they’ve already made their decision to go ahead and vote no. I think they realize it wasn’t a good thing.

Right now it’s a no go. We’ve seen a lot of deal-making before. If I was a betting person right now I would not bet what’s going to happen.

I asked Harris about the enrollees, likely more than 100,000 by the time the fiscal session meets, who would lose coverage if the “private option” was defunded.

We’ve got to stop the enrollment. Give those who we’ve signed on a chance to find something else or see where they’re at. That is doable in a certain amount of time. Are we going to go back to where we were in the first place? Kids need to be covered. I think ARKids is a wonderful program. We were doing fine on it. We may have to go back where there’s adults not covered. We may have to tick the clock backwards and I don’t see anything wrong with that.

Harris acknowledged that the private option funded the tax cuts last session.

Was it a smart move? No. We should have been fiscally responsible. If we said no to the private option there should have been no tax cuts. Even with the private option we should have thought far enough ahead and said, you know what, tax cuts at this time may not be the best thing for the state of Arkansas. ...There was a surplus and there could have been some short-term tax cuts to help families but we didn't do that. ... I'm a tax-cut person but I held my nose in voting for those tax cuts because I'm watching all these people vote for the private option and they get their tax cuts.

REP. ANDY MAYBERRY (Voted YES last session):

I’m going to go in to the session with an open mind. There’s some different ideas floating around out there. I did vote for it in the general session just a few months ago. It was almost pitched out there like a trial basis. Well, it got implemented January 1, we’re 17 days into it, I don’t think you really have enough measurable data to be able to say whether it’s a success or not a success, or it works or it doesn’t work, so if I were to have to vote right now today, I would vote to fund it again. But again I’m going to go into it with an open mind.

I’d like to see us be able to address some how or another to bring more true competition into the marketplace….I’d like to be able to see a system where everybody had some kind of skin in the game.

Right now, what I would be deeply concerned about in terms of not funding the private option…when you look at some other states like Georgia, for instance, the alternative for them was just to refuse any kind of expansion of any kind whatsoever. They’ve had a number of rural hospitals that have closed. And they have cited as one of the chief reasons some cutbacks in reimbursements from the federal government because of Obamacare. I think there are some states that may be better positioned to just say no and be able to weather a storm. I’m not sure that Arkansas is one of those. This needs to be fixed on the federal level, but I don’t think you’re going to see that until there’s a new occupant in the White House. Can Arkansas survive those three years without losing some hospitals and losing some providers and losing jobs? The Book of Ecclesiastes says it’s better to be a living dog than a dead lion. … What took place Jan 1, our federal taxes went up $600 million. We took about a $500 million hit in reimbursements to Medicare. Right off the top you’re looking at 1.1 billion that the federal government is sucking out of the state of Arkansas. If your decision is just say no, well then we just lost 1.1 billion dollars with nothing to show for it. To me that really doesn’t seem to make a lot of good economic sense.

REP. DAVID MEEKS (voted NO last session):

I think the private option was a good concept, I've always believed that. It just did too much. Right now it's about trying to find a way to transition out of the private option without the federal government penalizing Arkansas. Also we want to make sure we continue to cover Arkansas, those folks that are below 100 percent [the federal poverty line] to make sure they have the health care.

I asked what his plan would be to cover people below the poverty line without the federal dollars coming in with the private option.

I think that's the key, to see what we can do. We're going to have some time to transition out of the private option. That's not something that will be dealt with in this particular fiscal session. I think that's something that we'll look for in the 2015 session to see what we can actually do.

At this point, I would not support just completely defunding the private option. We don't want to put Arkansas in a situation where we could be penalized by the federal government. We need some clarity on that. ... Those folks right now have insurance — you don't want to just cut them off if at all possible. What you want to do is find some way to continue to give them options for affordable health care. That's the sense of everybody on both sides is we've got to find a way to have affordable access to health care here in the state of Arkansas but we have to do it in such a way that it's not going to bankrupt the state of Arkansas.

I know there’s a lot of things going around. I am not one that just wants to cut folks off without an alternative. We are working with other legislators to come up with an alternative. One of the things that has been pitched has been to say we’re going to transition out of this but we’re going to allow funding to continue until the end of the year. Because of the fact that Obamacare is still in place, we want to do what’s best for the people of Arkansas. We understand that sometimes with government programs you can’t just cut those programs off because it becomes too much of a shock to the system.

If we come up with a way to transition and that includes keeping the private option until the end of the year until we can transition out to the other year, that would be something I would actually be open to.

click to enlarge

Brian Chilson

Meeks: "I am not one of those who wants to cut folks off without an alternative."

What has happened before this point in terms of people assessing the private option has been abstract. Now we’re actually starting to see real operational, functional aspects of the private option that are pretty significant. This week we saw that Arkansas is quite different than any other marketplace in the country in terms of age, the low age of our insurance pool. That is significant in terms of what the cost is going to be. Now we have certainty. There were a lot of members who said they couldn’t vote for the private option last time because they said we don’t know how much it’s going to cost. Now we know that.

Secondly, the amendments to the waiver. … It’s important that members be mindful of the development process and look at the drafts and participate in crafting them and giving feedback. … A key element to the private option is the independence accounts (HSAs) that Senator Irvin helped get in to the law. That’s going to teach people how to become not users of health care, but consumers of health care. Mindful of cost, mindful of quality. This week you had former Bush HHS secretary Mike Leavitt in town, who had agreed to come up and help draft these amendments that are the heart and soul of the private option. He did so because he believes in what we’re doing. He sees it from a perspective of a governor, but also as an HHS secretary, and the efforts of Medicaid reform on a state by state level over years. His words were very clear: What we’ve done here is significant, pioneering, and transformative. It flips the script.

Members now are coming to terms with the fact that this is operational and it’s real. What we have said initially in the actuarial report has come true. … They’re even some who voted against it last time and have said quietly that their reasons for voting against it last time don’t exist now. They see what the cost is. It's not just abstract. This is not an actuarial analysis on a spreadsheet, this is real. …I think it’s worth — we’ve gotten it started, we’ve gotten the approval — I think it’s wroth giving it a year. Let’s see how it goes. We’ve got a significant pool, a group of people who are utilizing the services. I think we need to give it a shot. I think we need to push forward on the cause of consumerism.

I’m hopeful. The thing that I’m encouraged by is that we’re not having a purely political debate. We’re not having a debate based on various personalities in the legislature. What we’re having right now is a real, consequential policy discussion. I think you’re going to have a very informed legislature. You’re going to have men and women on both sides of the aisle with various worldviews and ideological persuasions that are going to dig in and look at this and are going to make an informed decision.

More by David Ramsey

The Department of Human Services continues to use a provider-led Medicaid managed care company that is part-owned by Preferred Family Healthcare, despite a recent decision to cut other ties with the Springfield, Mo.-based nonprofit enmeshed in multiple corruption scandals.

Another former executive with scandal-plagued mental health provider arrested.

The federal criminal information released as part of former lobbyist Rusty Cranford's June 7 guilty plea on bribery charges describes a Person 9 who worked for the nonprofit healthcare provider Preferred Family Healthcare and was associated with Cranford. The description of Person 9 appears to match Robin Raveendran, the former PFH executive — and former longtime staffer at the state's Department of Human Services — who was arrested Thursday in a separate case, charged in Independence County with two felony counts of Medicaid fraud after an investigation by the state's Medicaid Fraud Control Unit.

Gov. Asa Hutchinson and 2nd District U.S. Rep. French Hill have refused to participate in TV debates scheduled in September.

Chintan Desai, the Democratic candidate for 1st District Congress, just dropped by with some news: An endorsement, a debate date and a celebrity visitor for his Republican incumbent opponent, Rep. Rick Crawford.

A lawsuit was filed today in the federal court for the District of Columbia challenging Arkansas's work requirement for many Medicaid recipients.

Rep. John Lewis, the civil rights legend, will visit Little Rock Sunday afternoon for a fund-raiser for state Rep. Clarke Tucker, the Democratic candidate for 2nd District Congress against Republican Rep. French Hill.